Financing interest in Wind Energy projects blows cold

Construction News

Some Wind Energy Holding projects are at risk of delays as banks put project financing approvals on hold after police issued an arrest warrant for the company’s largest shareholder, Nopporn Suppipat.

Mr Nopporn is alleged to have been involved in a scandal linked to former Central Investigation Bureau chief Pol Lt Gen Pongpat Chayapan.

A 60-megawatt Watabak wind farm project in Chaiyaphum province could face a delay, as Wind Energy holds the largest stake at 75%, said Phongsak Siricupta, managing director of Demco Plc.

Demco holds a 4% stake in Wind Energy Holding and is its main project contractor.

For another 60-MW wind project in Phetchabun’s Khao Kho district, lenders are still providing financial support since Wind Energy owns only 30%, meaning construction remains on track, Mr Phongsak said.

Construction for both projects were earlier projected to start soon, feeding power into the grid from next year.

The shareholding structure of projects in which Wind Energy Holding is the major shareholder needs to be revamped to reduce potential interruptions, Mr Phongsak said.

Mr Nopporn indirectly holds a 63% stake in Wind Energy Holding. He is alleged to have hired Pol Lt Gen Pongpat’s network to force his creditor, Bandit Chotwitthayakul, to slash his debt to 20 million baht from 120 million.

Wind Energy plans to generate capacity of nearly 1,000 MW in the future. The company’s two wind power projects — Huoy Bong 2 and Huoy Bong 3 — in Nakhon Ratchasima province have started commercial operation.

Kasikornbank executive vice-president Vasin Vanichvoranun said KBank halted its loan approval process for both the Khao Kho and Watabak projects, a combined sum of 10 billion baht.

If the company can address the problem, KBank will reconsider its financial support for the two projects, he said.

The country’s fourth-largest lender by assets is one of four financial institutions providing loans to the Huoy Bong 2 and 3 projects. About 70% of both projects have been funded through a syndicated loan from KBank, Siam Commercial Bank, Tisco Bank and the Industrial and Commercial Bank of China (Thai). KBank alone extended 25% of the syndicated loan.

Mr Vasin said the Huoy Bong projects had no financial problems and would continue to run.

Mr Phongsak said Demco’s earnings would be shielded from any project delays, as projects to build power plants and transmission lines that were postponed earlier would be restarted soon.

A Demco subsidiary is also expected to sign a deal with the Laotian government to construct two power substations there.

DEMCO shares closed yesterday on the Stock Exchange of Thailand at 14.50 baht, up 50 satang, in heavy trade worth 1.93 billion baht.